What Changes Have Been Made to Protect Senior Investors?

The Financial Industry Regulatory Authority or “FINRA,” is a private corporation that acts as a self-regulatory organization of investment brokers and investment firms.

Its rules and guidance are designed to protect investors and to “ensure the integrity of today’s rapidly evolving market.”

The new FINRA Sanction Guidelines now expressly contemplate “whether the customer is age 65 or older” and “whether the respondent exercised undue influence over the customer and whether the customer had a mental or physical impairment that renders the person unable to protect his or her own interests”.

The National Law Review’s recent article entitled “National Adjudicatory Council Revises FINRA Sanction Guidelines” reports that FINRA Regulatory Notice 20-37 states the revised Sanction Guidelines that became effective Oct. 20, 2020.

In the revised Sanction Guidelines, FINRA and the NAC now directly discuss the issue of potential senior investor abuse. They also have revised the Sanction Guidelines to be consistent with FINRA Rule 2165 – Financial Exploitation of Specified Adults.

Further, FINRA asserts that “as with other considerations in the Sanction Guidelines, adjudicators should take a principles-based approach to assessing if the rule violations have more impact on elderly or impaired customers, including the customer’s ability to recover from sustaining financial losses.”

Moreover, FINRA states that these revisions to the Sanction Guidelines should be considered by adjudicators as only “aggravating factors” when considering an appropriate sanction for a FINRA violation.

The FINRA Sanction Guidelines don’t state specific sanctions for a particular violation. They now provide adjudicators with an additional “aggravating factor” to contemplate in determining the appropriate sanction.

The watchdog said that it was feedback from its Securities Helpline for Seniors that showed a pattern of concerns among senior citizens about brokers exploiting their financial accounts that caused them to take action “by putting in place the first uniform, national standards to protect senior investors.”

Reference: The National Law Review (Nov. 2, 2020) “National Adjudicatory Council Revises FINRA Sanction Guidelines”

Is Transferring House to Children a Good Idea?

Transferring your house to your children while you’re alive may avoid probate. However, gifting a home also can mean a rather large and unnecessary tax bill. It also may place your house at risk, if your children get sued or file for bankruptcy.

You also could be making a mistake, if you hope it will help keep the house from being consumed by nursing home bills.

There are better ways to transfer a house to your children, as well as a little-known potential fix that may help even if the giver has since died, says Considerable’s recent article entitled “Should you transfer your house to your adult kids?”

If a parent signs a quitclaim to give her son the house and then dies, it can potentially mean a tax bill of thousands of dollars for the son.

Families who see this error in time can undo the damage, by gifting the house back to the parent.

People will also transfer a home to try to qualify for Medicaid, but any gifts or transfers made within five years of applying for Medicaid can result in a penalty period when seniors are disqualified from receiving benefits.

In addition, transferring your home to another person can expose you to their financial problems because their creditors could file liens on your home and, depending on state law, take some or most of its value. If the child divorces, the house could become an asset that must be divided as part of the marital estate.

Section 2036 of the Internal Revenue Code says that if the parent were to retain a “life interest” in the property, which includes the right to continue living there, the home would remain in her estate rather than be considered a completed gift. However, there are rules for what constitutes a life interest, including the power to determine what happens to the property and liability for its bills.

There are other ways to avoid probate. Many states and DC permit “transfer on death” deeds that let homeowners transfer their homes at death without probate.

Another option is a living trust, which can ensure that all assets avoid probate.

Many states also have simplified probate procedures for smaller estates.

Reference: Considerable (Sep. 18) “Should you transfer your house to your adult kids?”

Can a Power of Attorney Protect My Assets as I Get Older?

Elder law attorneys help protect individuals as they grow older and then protect their beneficiaries when they pass away.

The Street’s recent article entitled “Guide to Protect Your Assets as You Age – Power of Attorneys” asks us to think about visiting your family doctor for the last 30 years but then needing to see a specialist for the first time. That’s because your family doctor isn’t a specialist, and they might miss something. The article explains that elder law attorneys are the specialists of the legal profession—they take a fresh look at a client’s situation and develop strategies to protect them and their families from the risks as we grow older.

Elder law attorneys show you how to protect yourself and your family. When partnering with an elder law attorney, they make certain that your estate goes to your family as you intended, with little or no tax liability.

An important tool for elder law attorneys is the Power of Attorney (POA). There are two of them: a medical POA and a financial POA. These allow you to designate a trusted agent to make your medical and financial decisions, when you are unable.

Unfortunately, the coronavirus pandemic has placed everyone in difficult circumstances. As a result, many hospitalized patients are without the proper estate planning documents. While things are letting up some, hospitals, nursing homes, and assisted living homes have shuttered their doors to visitors and non-essential workers in an attempt to minimize the spread of this disease. As a result, many patients are unable to get these documents signed.

Although some states initially prevented electronic signatures and notarization that would keep contact to a minimum, many have now permitted patients access to elder law and estate planning attorneys, when needed. These states have signed executive orders that allow for electronic signatures, which has been a huge help. Even so, this can be challenging for an elder individual.

Financial powers of attorney are not all the same either. They are just one tool in the toolbox.

A power of attorney can have a list of things you will permit your designated agent to do for you. Many of these documents do not give your agent enough power to protect you. That’s because they limit your agent’s abilities. That may sound good when you first sign them, but the result is that it makes things harder for your family, if you have a stroke and your loved one needs to protect your finances.

Reference: The Street (Sep. 24, 2020) “Guide to Protect Your Assets as You Age – Power of Attorneys”

How Do I Keep My Assets from the Nursing Home?

If you don’t have a plan for your assets when it comes time for nursing home care, they can be at risk. Begin planning now for the expenses of senior living. The first step is to consider the role of Medicaid in paying for nursing home services.

WRCB’s recent article entitled “How to Protect Your Assets from Nursing Homes” describes the way in which Medicaid helps pay for nursing homes and what you can do to shield your assets.

One issue is confusing nursing homes and skilled nursing facilities. Medicare does cover a stay in a skilled nursing facility for convalescence. However, it doesn’t pay for full-time residence in a nursing home. For people who can’t afford to pay and don’t have long-term care insurance, they can apply for Medicaid. That’s a government program that can pay nursing home costs for those with a low income. People who don’t have the savings to pay for nursing home care and then require that level of care, may be able to use Medicaid.

For those who don’t qualify for Medicaid when they need nursing home care, they may become eligible when their savings are depleted. With less money in the bank and minimal income, Medicaid can pay for nursing home care. It is also important to remember that when a Medicaid recipient dies, the government may recoup the benefits provided for nursing home care from the estate. Family members may discover that this will impact their inheritance. To avoid this, look at these ways to protect assets from nursing home expenses.

Give Away Assets. Giving loved ones your assets as gifts can help keep them from being taken by the government when you die. However, there may be tax consequences and could render you Medicaid ineligible.

Create an Irrevocable Trust. When assets are placed in an irrevocable trust, they can no longer belong to you because you name an independent trustee. The only exception is that Medicaid can take assets that were yours five years before you died. Therefore, you need to do this as soon as you know you’re going into a nursing home.

Contact an experienced estate planning, elder law, or Medicaid planning attorney to help you protect your assets. The more you delay, the less likely you’ll be able to protect them.

Reference: WRCB (Dayton) (Sep. 4, 2020) “How to Protect Your Assets from Nursing Homes”

How Do I Find a Great Elder Law Attorney?

Elder law attorneys specialize in legal affairs that uniquely concern seniors and their adult children, says Explosion’s recent article entitled “The Complete Guide on How to Find an Elder Law Attorney.”

Finding the right elder law attorney can be a big task. However, with the right tips, you can find an experienced elder law attorney who is knowledgeable, has the right connections and fits your budget.

While, technically, a general practice attorney will be able to handle your retirement, Medicaid and even your estate planning, an elder law lawyer is deeply entrenched in elder law. This means he or she will have extensive knowledge and experience to handle any case within the scope of elder law, like the following:

  • Retirement planning
  • Long-term care planning and insurance
  • Medicaid
  • Estate planning
  • Social Security
  • Veterans’ benefits; and
  • Other related areas of law.

While a general practice lawyer may be able to help you with one or two of these areas, a competent elder law lawyer knows that there’s no single formula in elder law that applies across the board. That’s why you’ll need a lawyer with a high level of specialization and understanding to handle your specific circumstances. An elder law attorney is best suited for your specific needs.

A referral from someone you trust is a great place to start. When conducting your elder law lawyer search, stay away from attorneys who charge for their services by the hour. For example, if you need an elder law attorney to work on a Medicaid issue, they should be able to give you an estimate of the charges after reviewing your case. That one-time flat fee will cover everything, including any legal costs, phone calls, meetings and court fees.

When it comes to elder law attorneys, nothing says more than experience. An experienced elder law lawyer has handled many cases similar to yours and understands how to proceed. Reviewing the lawyer’s credentials at the state bar website is a great place to start to make sure the lawyer in question is licensed. The website also has information on any previous ethical violations.

In your search for an elder law attorney, look for a good fit and a high level of comfort. Elder law is a complex area of law that requires knowledge and experience.

Reference: Explosion (Aug. 19, 2020) “The Complete Guide on How to Find an Elder Law Attorney”

Why are Medicare Scams Increasing in the COVID-19 Pandemic?

Medicare scams are increasing in the COVID-19 pandemic. Motley Fool’s recent article entitled “Seniors, Be Wary of These Medicare Scams During COVID-19” discusses some red flags you should look out for to avoid being a victim.

  1. Callers requesting your Medicare number. Medicare typically won’t call beneficiaries and randomly ask them to verify their benefits. If someone calls you and requests your Medicare ID number, don’t give them your information.
  2. Callers requesting your Social Security number. If a bad guy gets your Social Security number, he can do a number of things with that information, any of which will create headaches for you. This includes opening a credit card in your name and charging a lot of expenses on it. If you get a caller who says he’s a Medicare representative who needs your Social Security number to process a health claim, don’t give it to him.
  3. Email or phone calls asking you to send money. Medicare doesn’t sell prescriptions over the phone or ask seniors to pre-pay for services. If someone calls asking you to send money or give out credit card information, it’s a bogus caller.
  4. A promise for early access to a COVID-19 treatment or vaccine. Right now, there is no COVID-19 vaccine. There is also no mail-order treatment that you can stock up on to protect yourself in case you’re struck with the virus. Therefore, don’t believe a caller who says he’s from Medicare and is offering you a chance to get in on a groundbreaking medication. Don’t pay him or share your Medicare ID number during that conversation. When an effective vaccine is available, Medicare will pay for it and let you know how to get it.
  5. Someone at your door claiming to be from Medicare. Medicare doesn’t have sales reps. Therefore, if someone says they’re from Medicare, lock the door and demand that that person leave immediately. Call the police, if you need help.

When a lot of seniors are worried, isolated, and in financial straits, they don’t need to fall victim to a scam. Be prepared and be aware of what common fraud attempts look like. That way, you’ll be in a good position to protect yourself.

If you receive a suspicious email or phone call, report it at 1-800-MEDICARE. This might prevent another senior from falling victim to what could be an extremely dangerous trap.

Reference: Motley Fool (May 25, 2020) “Seniors, Be Wary of These Medicare Scams During COVID-19”

How Do I Talk about End-Of-Life Decisions?

With the coronavirus pandemic motivating people to think about what they prioritize in their lives, experts say you should also take the time to determine your own end-of-life plans.

Queens News Service’s recent article entitled “How to have the hardest conversation: Making end-of-life decisions” reports that in this coronavirus pandemic, some people are getting scared and are realizing that they don’t have a will. They also haven’t considered what would happen, if they became extremely ill.

They now can realize that this is something that could have an impact upon them.

According to the U.S. Centers for Disease Control and Prevention (CDC), 70% of Americans say they’d prefer to die at home, while 70% of people die in a hospital, nursing home, or a long-term care facility. This emphasizes the importance of discussing end-of-life plans with family members.

According to a survey of Californians taken by the state Health Care Foundation, although 60% of people say that not burdening their loved ones with extremely tough decisions is important, 56% have failed to talk to them about their final wishes.

“Difficult as they may be, these conversations are essential,” says American Bar Foundation (ABF) Research Professor Susan P. Shapiro, who authored In Speaking for the Dying: Life-and-Death Decisions in Intensive Care.

“Now is a good time to provide loved ones with the information, reassurance and trust they need to make decisions,” Shapiro says.

Odds are the only person who knows your body as well as you do, is your doctor.

When thinking about your end-of-life plans, talk with your doctor and see what kind of insight she or he can provide. They’ve certainly had experience with other older patients.

If you want to make certain your wishes are carried out as you intend, detail all of your plans in writing. That way it will be very clear what your loved ones should do, if a decision needs to be made. This will eliminate some stress in a very stressful situation.

Even after the COVID-19 pandemic is over, everyone will still need a will.

Talk with an experienced elder law or estate planning attorney to make certain that you have all of the necessary legal documents for end-of-life decisions.

Reference: Queens News Service (May 22, 2020) “How to have the hardest conversation: Making end-of-life decisions”

Medicare Patients Be Wary of COVID-19 Scams!

It’s still not easy to get tested for COVID-19 in many states, so it’s not surprising to learn that scammers are exploiting the shortage. They’re especially preying on the elderly.

Money Talks News’ recent article entitled “Are You on Medicare? Beware Coronavirus Scammers” reports that scammers use stolen personal data to commit Medicare fraud and identity theft, according to the U.S. Department of Health and Human Services.

Medicare warned beneficiaries in a recent email, “Unfortunately, scammers are using the COVID-19 pandemic to try to steal your Medicare number, personal information and money. And they’re using robocalls, social media posts and emails to do it.”

Some of these criminals are even knocking on people’s doors to talk them out of their personal data.

Seniors are advised to not divulge their personal information, including their Medicare number, with anyone, except a trusted health care provider or other qualified expert. If you’re unsure who’s legitimate, call for help and advice from your Senior Medicare Patrol, volunteer groups funded by the Department of Health and Human Services (HHS).

Health and Human Services says that your personal information can be used to fraudulently bill federal health care programs and commit medical identity theft.

You may also wind up being responsible for charges, if Medicare denies the claim for an unapproved test. You need to protect your Medicare and Social Security information, because it can be used in fraud schemes. If you think you’ve been contacted by a scammer, do the following:

  • Report suspected criminals to the National Center for Disaster Fraud Hotline at 866-720-5721 or write to disaster@leo.gov.
  • Be on guard, if someone requests your Medicare number, when you didn’t ask for services.
  • Be suspicious of those offering coronavirus supplies or testing.
  • When using social media, don’t click or respond to advertisements and offers for coronavirus testing.
  • If you think you should get a COVID-19 test, ask your doctor or doctor’s office.

In addition, the FBI advises everyone — not only seniors — to be aware of and to report:

  • Bogus emails purporting to be from the Centers for Disease Control and Prevention (CDC).
  • Phishing emails, which try to trick you into sharing personal information.
  • Counterfeit treatments and equipment, like sanitizing products, masks, face shields, goggles, respirators, protective gloves or gowns.

Reference: Money Talks News (May 19, 2020) “Are You on Medicare? Beware Coronavirus Scammers”

When will Social Security Stimulus Checks Arrive?

There have been a few hiccups in the distribution of stimulus checks, and some people may have to wait months before their check is delivered. Most of us are able to monitor the status of our check by using the IRS’s Get My Payment tool. However, for many Social Security beneficiaries, they’ll see a message that says “Payment Status Not Available.” That’s because most Social Security recipients don’t file tax returns.

Motley Fool’s ’s recent article entitled “Social Security Beneficiaries: Here’s When You’ll Get Your Stimulus Check” advises that if you are unable to track your payment, here’s when you can expect to receive your stimulus money if you’re collecting Social Security benefits.

Those first to see their stimulus checks will be the ones who have their direct deposit information on file with the IRS. The agency will deposit the stimulus check straight to their bank account.

However, if you receive your benefits in the mail via paper check, or if you’re not certain if your bank account information is on file, you can provide your information through the Get My Payment tool. This will help you get your check faster.

While using direct deposit will ensure you get your check the quickest, you can get your check in the mail instead if your bank account info isn’t on file. The IRS started sending stimulus checks the week of April 20, and it expects to mail out about five million checks per week. At that rate, it could take 20 weeks for all checks to be delivered.

Whether you receive your check in days or months will depend on your income. The IRS is sending checks in a particular order, and those with the lowest-income individuals will get their checks first. If your income is nearer to the $99,000 per year income limit (or $198,000 per year for married couples), you might not receive your check until late August or early September.

If your income is somewhere in the middle, it’s estimated that you’ll get your check sometime this summer.

If you’re receiving Supplemental Security Income (SSI), you’ll see your stimulus payment in early May, according to the IRS. Whether you receive that money via direct deposit or paper check will be based on whether the IRS has your bank account information on file.

The COVID-19 pandemic has caused a real financial hardship for millions of Americans, and waiting for your stimulus check can be stressful, especially if money is tight and you need the extra money. However, it’s a little easier when you can at least calculate when your cash is expected to be delivered.

Reference: Motley Fool (April 27, 2020) “Social Security Beneficiaries: Here’s When You’ll Get Your Stimulus Check”

Is Long-Term Care Insurance Really a Good Idea?

Forbes’ recent article entitled “Is Long-Term Care Insurance Right For You?” says that a big drawback for many, is the fact that LTCI is expensive. However, think about the costs of long-term care. For example, the current median annual cost for assisted living is $43,539, and for a private room in a nursing home, it’s more than $92,000.

Another issue is that there’s no way to accurately determine if in fact you’ll even need long-term care. Much of it depends on your own health and family history. However, planning for the possibility is key.

Remember that Medicare and other types of health insurance don’t cover most of the cost of long-term care—what are known as “activities of daily living,” like bathing, dressing, eating, using the bathroom and moving. Medicare will only pay for medically necessary skilled nursing and home care, such as giving shots and changing dressings and not assisted-living costs, like bathing and eating. Supplemental insurance policies generally don’t pay for this type of care.

Those with a low net worth might qualify for long-term care provided under Medicaid.

Shop around, because policies and prices are different. Check the policy terms and be sure you understand:

  • The things that are covered, such as skilled nursing, custodial care, and assisted living
  • If Alzheimer’s disease is covered as it’s a leading reason for needing long-term care
  • If there are any limitations on pre-existing conditions.
  • The maximum payouts
  • If the payments are adjusted for inflation
  • The lag time until benefits begin
  • How long benefits will last
  • If there’s a waiver of premium benefit, which suspends premiums when you are collecting long-term care benefits
  • If there’s a non-forfeiture benefit, which offers limited coverage even if you cancel the policy
  • If the current premiums are guaranteed in future years, or if there are limits on future increases
  • How many times rates have increased in the past 10 years
  • If you purchase a group policy through an employer, see if it is portable (if you can take it with you if you change jobs).

Typically, when you are between 50 to 65 is the most cost-effective time to buy LTCI, if you’re in good health. The younger you buy, the lower the cost. However, you will be paying premiums longer. Premiums usually increase as you get older and less healthy. There’s a possibility that you’ll be denied coverage, if your health becomes poor. Therefore, while it’s not inexpensive, buying LTCI sooner rather than later may be the best move.

Reference: Forbes (April 17, 2020) “Is Long-Term Care Insurance Right For You?”